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New Ground 147.1 -- 04.01.2013
New Ground 147.2 -- 04.15.2013
New Ground 147.3 -- 04.27.2013
by Bob Roman and Ron Baiman
Illinois' pension deficit is a state debt problem not a pension spending problem. For decades, we have been taxing the rich and corporations at much too low a rate to even support the present, stingy level of social spending in Illinois.
Among the 50 states, Illinois is 38th in the share of personal income taken by state and local taxes (2011 Census). Illinois taxes are highly regressive, with the most recent (2007) ITEP data showing that Illinois has the third highest rate of overall (income, sales, property) taxation of the lowest 20% of non-elderly families. This is surpassed only by Florida and Washington, states with no income taxes. Just 11 other states tax the top 1% of non-elderly families at a lower rate than Illinois.
Illinois ranks 44th in non-federally subsidized state spending on public services, net of pensions. We would have to increase our spending, as a share of state GDP, by $12.9 billion to be in the middle of the 50 states, according to 2011 NASBO and BEA data.
It doesn't need to be this way. Not even the lame excuse of "competitiveness" applies. The Illinois corporate income tax of 7% is lower than Wisconsin (7.9%) and lower than Indiana (8.5%). Furthermore, a Personal Property Tax is assessed on corporations in addition to the income tax in both Wisconsin and Indiana. According to the IDOR, in Illinois only about 10% of Illinois establishments (117,832) are C-corporations liable for corporate income tax. Of these, only a third pay any corporate income tax, and only somewhat less than 3% of them (367) pay more than a million in corporate income tax. Even if you make the unwarranted assumption that taxes determine business location, Illinois has room to raise business income taxes.
And that's not counting tax loopholes. Closing just 6 loopholes (CME Income Tax Reduction, Foreign Dividends, Domestic Production Credit, Online Hotel Purchases, Offshore Oil Drilling, Retailer's Discount) would bring in $880 million a year.
There are new taxes that would bring in even more revenue without affecting the average citizen at all. For example, a $1 per contract financial Speculation Sales Tax applying to high wealth financial traders would have raised up to $6.1 billion in 2011. See the January, 2013, Northern Illinois Jobs with Justice forum "Funding Strong Schools and Fair Pensions" at left.
But why should all this extra revenue go to pay pensions? The headlines proclaim a pension deficit of nearly $100 billion ($94.6 billion, according to the CGFA in June, 2012). The 1994 law regulating Illinois contributions to its pension systems was set up much like a balloon mortgage. It was never designed to work. It was intended to allow the State to continue paying as little as possible for as long as possible.
Most of the increase in Illinois' pension payments is due to an actuarial calculation, not excessive pension costs or real debt. The assumption behind unfunded pension liability is that there is no guarantee the institution behind the pension will be there to pay the pension. Income generating assets must be there instead. For a private corporation, this is a reasonable assumption. They come and they go. For governmental entities, particularly states, it is less so. The balloon payments toward that unfunded liability were $4.1 billion in FY 2012 and will be $5.1 billion in FY 2013. The "normal cost" of current pensions is $1.6 billion each year. The actual amount Illinois needs to pay each year in order to meet its obligations is far less than is required by its own laws though meet that obligation we must. Dodging it is unconstitutional in Illinois.
Don Washington at The Mayoral Tutorial blog said it well:
Not fulfilling the negotiated pensions is wage theft. And wage thieves are no better than horse thieves in this part of the country.
by Bob Roman
One of the difficulties of banging out an article at the last minute with a co-author is an occasional failure to communicate, losing some important subtleties along the way.
Illinois does not have a personal property tax, for individuals or for corporations. The much hated, much evaded tax was abolished for individuals in 1969 and for businesses in 1979. Some downstate Illinois communities advertise this absence as an argument to attract new businesses. But wait! Illinois does have a personal property tax for some businesses. It's a 2.5% income tax surcharge on corporations. This money goes directly to local governments to replace the revenue lost when the taxes were abolished. Thus the claim, by some business groups, that Illinois has the highest corporate income tax in the region. But, as Ron Baiman put it:
One can well imagine Mr. Suit N. Tie grumbling, "Well, wherever the money goes, all I notice is: It's gone." He's got a point, except the story doesn't end there. The Illinois CIT and PPRT are both taxes on income. The personal property tax (like the property tax on real estate and the estate tax paid on inheritance) is a tax on wealth. It makes direct comparisons rather awkward.
The question comes down to the total tax burden on corporations and citizens. It's messy. It should include local taxes as well as tax evasion both legal, illegal, and yet to be decided legal. Just one example, in Illinois, home rule governments have fairly broad taxing powers. In November of 2012, Cook County passed a one-time "personal property tax" on items purchased outside the county, effective April 1, 2013 (no kidding) -- with exceptions, of course! The County Board meant well, but does anyone think the County is competent to enforce this?
by Bill Barclay
So, what's not to like about the US economy? The stock market is making all time (nominal) highs, corporate profits at record levels, housing prices rising -- well, maybe there's still the question of jobs: the lack thereof. Today's BLS jobs report is certainly better than many of those in the past year: 236,000 jobs created compared to the 2011 - 2012 averages, both of which were in the 150 - 155,000/month range. That level of job creation is sufficient to absorb new entrants plus 35 - 40,000 unemployed. The level of job creation in February would provide about 120,000 jobs above the level of new labor market entrants. However, the downward revision of the new jobs numbers for January 2013 leaves 2013 YTD with only 60,000 / month job creation above the level necessary to provide jobs for new labor force entrants.
Let's put these numbers in context: there remain over 12 million officially unemployed and another almost 7 million people classified as "not in the labor force" but stating that they want a job. Even at the rate of job creation for February, 2013, it would take 158 months -- 13 years -- to provide jobs for all who seek them. The experience of past recessions suggests that the actual number of jobs needed is actually greater than 19 million; when/if job creation picks up after a recession, many people who have given up looking for work return to seeking jobs.
Another way of putting these numbers in context is to remember that there are 2.5 million fewer people employed today than in December, 2007, the month that marks the beginning of the Great Recession. Further, since that date, the same time the labor force has grown by almost 2 million and those "not in the labor force" have grown by 12 million. Or you can just remember that if these 19 million people were standing shoulder to shoulder, they would stretch from Bangor Maine to Los Angeles and back -- and there would still be 2 million people not in that line.
When we break down the unemployed by gender, ethnicity and race, we find the long-term patterns of unequal labor market access continuing. While the Great Recession saw heavier job losses among males than females, over the past year males have accounted for 75% of total employment growth. Comparing unemployment by race and ethnicity, the unemployment rate for African Americans is 13.8% and for Hispanics 9.6% vs. an overall unemployment rate of 7.7% and 6.8% for white workers.
These are the figures. But we must always remember that, behind the dry numbers, are stories of dreams destroyed, of families under stress that often exceeds the breaking point, of foreclosed homes because there is no money for the mortgages, and of lost potential for us all, both the unemployed and the employed.
It is, therefore fitting that Rep. John Conyers has announced plans to reintroduce his "21st Century Full Employment and Training Act" and that Rep. Ellison plans to reintroduce his bill that levies a small tax on the trading of financial assets with the revenues targeted to job creation. DSA has endorsed both of these initiatives (see dsausa.org for literature on these proposals) and we remain convinced that recovery from the financial crisis and the subsequent economic stagnation requires much, much more than too many of our legislators in Washington have even conceived, much less done. We must constantly push our political and economic elite to move off the dead end of deficits and instead recognize the needs of our people for full time, living wage employment.
Editor's Note: a version of this article was prepared earlier as the Chicago Political Economy Group's commentary on the Bureau of Labor Statistics' February jobs report. See www.cpegonline.org .
by Peg Strobel
In and around the month of April, DSA and YDS groups around the country are expressing the support for women who seek abortion by participating in a real or virtual Bowl-A-Thon: bowling for fun and fundraising.
Socialist feminists know that women deserve free abortion on demand, a full range of reproductive health care and family services and an economic system allowing for full employment and compensation for care-giving of the elderly and young. "Reproductive justice" is a concept that moves beyond the notions of "choice" and "rights." It links the calls for reproductive choice (a woman's right to control her own body) to the broader issues of economic justice and human rights (creating conditions that enable people to have children, not only to not have them). Access to abortion is one small, but critical, part of reproductive justice.
Anti-abortion forces have greatly limited women's ability to exercise their right through legislated restrictions. Lack of money is an ongoing problem for some women. And that's a problem that we can help remedy right now.
The Chicago Abortion Fund, or CAF (chicagoabortionfund.com ), has a mission that is not limited to providing funds for low-income women, though doing so is an important part of their work: "The Chicago Abortion Fund fights to overturn economic barriers to reproductive choice. Through direct service, CAF assists women in obtaining safe abortion services. In partnership with the women we serve, CAF engages and mobilizes low-income and poor women to become advocates for expanded reproductive access."
How can you help? Go to www.brownpapertickets.com/event/336918 and donate. Or, if you want to join a team and bowl on March 30, contact CAF for information at 312.663.0336.
Spread the word to friends outside Chicago. Find a list of cities where bowl-a-thons are happening at http://bowlathon.nnaf.org/nnafbowl/findevent.asp .
For more about CAF, listen to Chicago DSA's "Talkin' Socialism" interview, episode 11: www.chicagodsa.org /audarch6.html.
by Bill Barclay
It seems like every day there is yet another attack on the wealthy -- increased high end tax rates in the US, proposals to cap bonuses in Europe. Where will it end? Will they all move to other countries?
Well, one place they're not likely to move to is Switzerland. On March 3, Swiss voters approved a proposal that will give shareholders a final say on the compensation of CEOs, corporate directors and other high paid execs. Further, pension funds are required to participate in these shareholder votes. In addition -- and perhaps more significantly -- the proposal also prohibits the front end signing bonuses and back end golden parachutes that are rampant in the top levels of the corporate world. And the proposal didn't just pass -- it passed with almost 68% of the vote. Even in business friendly Switzerland, people are fed up with excess, the gross inequality that is the single most striking feature of neoliberal capitalism and probably the policy that neoliberal care most passionately about.
The success of the referendum was undoubtedly helped by the announcement of Novartis during the campaign that they planned to pay their departing CEO $78 million as a farewell present. As a spokeswoman for the business federation that campaigned against the proposal admitted, there were "major mistakes" by her side, adding that after the Novartis announcement, "It became impossible to return to a reasonable debate (translation, the voters saw the reality and didn't like it). One of the other arguments of the opposition was that obscene levels of compensation were necessary
Of course, the shareholders will have to act and, like the US, stock ownership in Swiss located companies is concentrated among upper income families and large institutions. However, unlike the compensation committees made up of "Friends of the CEO," shareholders can be anyone or any institution. This means much less control by the CEO and directors of the compensation decision. Opponents of the proposal -- and this included all the major political parties in Switzerland -- also trotted out the notion that it would scare away top international talent as CEOs leave for greener pastures elsewhere. However, this common shibboleth ignores the reality of who becomes a CEO. Over 80% of the CEOs at the world's largest companies come from inside the firm and less than 0.5% are poached from another company where they were CEOs.
This is clearly not THE answer to out-of
control inequality but it is an interesting tactic.
A statement by the DSA National Political Committee.
Democratic Socialists of America (DSA) supports the bill advanced by John Conyers (D-MI), HR 900, to simply cancel the $85 billion in "sequestration" cuts. These cuts will harm millions of low-income Americans, while weakening an already anemic, jobless recovery.
According to the Congressional Budget Office, if the cuts are fully carried out, they will cause a 0.6% drop in GDP and a loss of over 700,000 jobs. The layoffs of 700,000 public employees since 2008 have already contributed to unconscionable levels of unemployment.
We do not have a deficit crisis in this country; we have a jobs crisis. Sequestering will increase the deficit--not decrease it--by slowing the economic recovery and by keeping more people out of work and not paying taxes. We need a 21st-century full employment program to make public investments that help the long-term unemployed and returning veterans find decent jobs that contribute to the economy and to society. The sequester adds to the jobs crisis by reducing extended unemployment benefits and slashing job training programs for returning veterans.
The domestic sequestration cuts will have particularly harsh effects on our poorest and most vulnerable citizens. For the remainder of the 2013 fiscal year, they mandate 12% cuts in Title I aid to low-income schools and child nutrition programs (WIC). Seventy thousand children will lose Head Start; 14,000 K-12 school teachers will be laid off; and 600,000 women and infants will be denied nutrition assistance. In addition, 125,000 families will risk homelessness because of cuts in federal rental assistance, and 375,000 mentally ill and disabled citizens will lose desperately needed social services.
The sequester will also cripple the vital work of federal regulatory agencies. The Federal Aviation Administration will have to furlough 4,000 employees each day, leading to massive flight delays and a decrease in flight safety. Over the next seven months, 2,100 fewer food safety inspections will be conducted at food processing plants. In addition, hundreds of thousands of government employees will experience a 12% drop in pay.
Although we should cut massive amounts of Pentagon pork, the automatic cuts in defense instead disproportionately target civilian employees of the Pentagon for layoffs rather than slashing wasteful and unneeded new weapons programs.
Contrary to the corporate-led drumbeat to "Fix the Debt," we do not have a spending problem in Washington. We have a revenue shortage caused by massive tax giveaways to the rich and corporations. We could achieve fiscal balance by restoring taxes on corporations and the rich to the pre-Reagan rates and by instituting a modest financial transactions tax. In addition, we could create jobs through cutting unnecessary weapons programs and using these funds for public investments in infrastructure, mass transit and alternative energy. The Congressional Progressive Caucus's "Balancing Act" would carry out these measures.
DSA also rejects President Obama's flirtation with a cut in the cost-of-living adjustment formula that protects seniors on Social Security from inflation. Instead, DSA backs the call of Alan Grayson (D-FL), Mark Takano (D-CA) and 25 other progressive Democratic members of the House to reject any cuts in the real value of Social Security, Medicaid and Medicare benefits.
Rather than cut programs that benefit the vast majority and the vulnerable, we must take steps to secure their future. Future Social Security benefits can be readily guaranteed by removing the $113,700 cap on income subjected to the Social Security payroll tax. And we can rein in runaway health care costs by having the federal government use its huge purchasing power to lower the costs of drugs and by moving towards a Medicare for All system that would eliminate the waste of a for-profit private insurance system.
A brief glance at the disastrous effects
of austerity politics in Europe demonstrates that you can't cut
your way out of a Great Recession. The sequester serves only
to deepen the economic crisis. It must be reversed.
Compiled by Bob Roman
Episode 25, recorded 03-09-2013: Cleaning Up After ICE -- Colleen Dille and Michael Gosch from the Interfaith Committee for Detained Immigrants discuss how migrants and refugees released from Federal custody have often lost everything while finding themselves hundreds of miles from home. Volunteers from the Post-Detention Accompaniment Network are there to help get them home. For additional information, visit Detention Watch Network, National Network for Immigrant and Refugee Rights, and Illinois Coalition for Immigrant and Refugee Protection.
Socialists on Facebook
Greater Oak Park DSA now has a Facebook page: facebook.com/GOPDSA . As of this instant in typing, the page has accumulated 31 "likes". Compared to the Chicago DSA Facebook page, it's pretty lively (though Chicago DSA has 392 "likes"). Check it out. Like us.
"Today's Other America"
On Sunday, April 28, Greater Oak Park DSA and the Oak Park Coalition for Truth and Justice will screen Michael Harrington and Today's Other America: Corporate Power and Inequality. Directed by Bill Donovan and based on interviews done in the late 1990s, the film explores the ongoing relevance of the work of Michael Harrington, one of DSA's founders. Harrington's book The Other America helped launch President's Johnson's War on Poverty in 1964. Today, we face expanding poverty, the result of decades of corporate greed, declining rates of unionization and wages that haven't kept up with inflation -- and that was before the Great Recession and foreclosures hit.
During the 1960s and 1970s, in response to government programs, the official poverty rate in the U.S. declined, falling from 17% in 1965 to 11% in 1978. The rate then increased throughout the 1980s but fell back to 11% in 2000. However, in 8 of the first 11 years of the 21st century the rate has risen. It is now back to 15%, by official count. Another way of defining poverty is to consider incomes less than half of the median income as poor. Using this definition, over 19% of the U.S. population are poor. (In comparison, most western and northern European countries have less than 10% of their people at incomes less than half the median.) Recently the Brookings Institution reported that one-third of Americans live in poverty or near-poverty, while Yale political scientist Jacob Hacker's work demonstrates that over half of American families have experienced serious economic troubles over the past decade.
Join us to see the film: Sunday, April 28, 2 PM to 4 PM, 2nd floor small meeting room, Oak Park Public Library, 834 Lake Street, Oak Park 60301.
The Nelson Algren Committee hosts the 24th annual Nelson Algren Birthday Party on Saturday, March 23, 8 PM, at the Bloomingdale Arts Building, 2418 W. Bloomingdale (just west of Western Ave., and near the Blue Line's Western stop). The party celebrates the writer who depicted mid-20th-century urban America with a cool eye and a compassionate heart, as seen in such masterpieces as The Man with the Golden Arm, Neon Wilderness, Never Come Morning and his great prose poem, Chicago: City on the Make.
This year's recipient of the coveted Nelson Algren Committee Award is Tom Palazzolo, Chicago filmmaker extraordinaire, who will show some of his outstanding work. The party features a one-of-a-kind blend of readings, poetry, music and video, as well as tributes to Algren and commentary on his continued relevance. Admission is $10 at the door, $5 for seniors and students with ID.
For more information about the program and the committee, go to www.nelsonalgren.org .
Robin Hood Tax
The Speculation Sales Tax is now represented in the Illinois General Assembly by two bills. That they are virtually identical is a bit difficult, but it suggests there's a bandwagon about to start moving. To sign a petition in support, go to www.chicagodsa.org under "Take Action".
Wednesday, March 20, 8 PM Eastern: March New Member Orientation. Conference call. RSVP required for call-in number. Call 212.727.8610 or go to www.dsausa.org/calendar. Are you a newly joined DSA member? Come learn about the different ways to get involved!
Saturday, March 23, 3 PM to 4:30 PM Eastern: Member training webinar on active outreach and recruitment. RSVP required. Go to www.dsausa.org/training_webinar_active_outreach_2013323
DSA has joined the National Network for Immigrant and Refugee Rights (nnirr.org).
DSA in the News
From New Ground 146.1, we noted that, like the Boston Review, The New York Times interviewed Bhaskar Sunkara about Jacobin. And of course DSA came up. Demonstrating both the incredible "market penetration" DSA has achieved among conservatives and conservatives' utter vacuity, Saki Knafo at the Huffington Post interviewed the president of a gun rights group at Lone Star College shortly after a shooting there, and found him fretting over DSA's evil influence on Obama.
From New Ground 146.2, DSA used Boulder's Left Hand Books as a meeting place, noted the Daily Camera in a story about the bookstore's closing. David Anderson, a DSA activist who helped found the bookstore in the 1970s, has a brief history of the store in the Boulder Weekly. DSA was used as an example of why changing demography will not lead the Democratic Party to victory in a commentary in the Memphis Flyer. (The Memphis DSA Organizing Committee posted a response.) Kent State University's Kent Wired noted YDS' participation in demonstration against Andrew Sullivan's presentation on campus, with interviews. WSLR's "A Community of Voices" program interviewed DSA National Director Maria Svart about socialism.
Since then Bhaska Sunkara posted at Jacobin the transcript of a talk he gave at the Young Democratic Socialists' winter conference. Ohio University's Interactivist covered a demonstration protesting Citizens United organized by the YDS chapter there. At The Aquarian Weekly ("New Jersey's oldest alternative weekly"), an essay on the "S" word by Alex Benson mentioned DSA. The same issue included a long article by Benson covering the YDS winter conference.
We're fighting forward! That's the title of this year's Debs -- Thomas -- Harrington Dinner because, for the first time in decades, it's likely that even our defensive battles are setting the stage for future victories. What better time to celebrate our accomplishments and to take inspiration for future victories and reversing past defeats? You're invited!
Our honorees this year all fight forward: William McNary, Keith Kelleher, and the Chicago Teachers Union. Our featured speaker is Amy Dean. The 2013 Dinner will be at the Holiday Inn Mart Plaza on Friday evening, May 3rd. This is a union hotel next to the Merchandise Mart. For more information, CLICK HERE.
Events listed here are not necessarily endorsed by Chicago DSA but should be of interest to DSA members, friends and other lefties. For other events, go to http://www.chicagodsa.org/page9.html.
Tuesday, March 19, 11 AM to 12:30 PM
Tuesday, March 19, 3:30 PM
Tuesday, March 19, 7 PM to 9 PM
Tuesday, March 19, 7 PM
Wednesday, March 20, 11:15 AM
Wednesday, March 20, 1 PM to 2 PM
Wednesday, March 20, 7 PM
Wednesday, March 20, 7 PM
Thursday, March 21, 5:30 PM to 7:30
Thursday, March 21, 6 PM to 7 PM
Thursday, March 21, 6 PM
Thursday, March 21, 6:30 PM to 8 PM
Thursday, March 21, 7 PM to 9 PM
Friday, March 22, 8:30 AM to 11:30 AM
Friday, March 22, 11:30 AM to 1 PM
Saturday, March 23, 8:30 AM to 12:30
Saturday, March 23, 1 PM
Saturday, March 23, 8 PM
Sunday, March 24, NOON
Sunday, March 24, 3 PM to 5 PM
Sunday, March 24, 6 PM to 8 PM
Monday, March 25, 5:30 PM to 7:30 PM
Wednesday, March 27, 4 PM
Tuesday, March 28, 6 PM
Friday, March 29, NOON
Friday, March 29, 3 PM to 5 PM
Wednesday, April 3, 2 PM to 4 PM
Wednesday, April 3, 7 PM
Thursday, April 4, 6:30 PM
0. DSA News
2. Ars Politica
3. Democratic Socialism
4. Upcoming Events of Interest
|Protest School Closings
by Bob Roman
The Chicago Teachers Union (CTU) and friends brought together a large downtown evening rush hour protest on March 27, complete with scripted civil disobedience. It had become an uncomfortably chilly afternoon. Some in the Chicago Police Department estimated the crowd at no more than a thousand. Supporters said four to eight thousand. For my part, eight thousand seems very plausible as a count of all those who participated, and it was a good mix of community organizations, parents, students, and union members. At any one moment the count may have been somewhere north four thousand. People came and went. CANTV broadcast the entire event live, though the first 4 minutes of the recording is waiting for the rally to begin.
I suspect Emanuel's calculation is that his biggest electoral weakness, in the next Mayoral election, is in the Black communities. At the same time, this particular electorate has been notable in its consistent failure to organize on its own behalf and that is unlikely to change by the time of the next election. Therefore, if you want to sell off public education to potential campaign contributors, those are the communities to target. Furthermore, while some of the biggest union locals in the city were represented at the rally, the union movement was similarly disunited in the last municipal election. If the economy has not improved much by the next election, all you will need to do is waive jobs in the air to wreck solidarity.
Additional coverage and commentary about the rally:
GOPDSA member Bob Simpson points out that there is a community-based alternative to Board of Education's school closing plan HERE. Don Washington, at Mayoral Tutorial, reinforces the point HERE, and Washington provides some additional context HERE.
At In These Times, Kenzo Shibata points out how the current Chicago Public Schools CEO Byrd-Bennett was hired to specifically to close schools; it is part of her resume, HERE. Labor Beat produced a documentary about the bogus hearings leading up to the school closure plan HERE. And prior to the release of the school closure plan, Chicagoland Researchers and Advocates for Transformative Education released a paper on just how well the arguments in favor of school closures (underperformance, cost savings, and underutilization) stand up under examination HERE.
At The Progressive Fox, John Laesch follows the money to Senator Heather Steans, Stand for Children, and charter school enterprises HERE. David Sirota provides a look of how it works as a business strategy HERE.
On Wednesday, March 20, Cathy Youngblood returned to Chicago for something similar to an election rally. Several hundred people crowded into the Chicago Temple in downtown Chicago to hear her, and others, speak. Of course, it was largely preaching to the disenfranchised; very few of us are well off enough to vote in company matters, nevermind that it is a democracy of dollars not people. In that sense, this campaign stop had something in common with that long tradition of minor party candidates who campaign more to deliver a message. While Youngblood spent some time speaking about the benefits of having worker representation on the board, perhaps her more important message was for workers to be unafraid to speak up when confronted with abuse, exploitation or unfairness.